According to ADP's Wednesday report, U.S. employers created far fewer jobs in August than they expected due to the Covid resurgence and cutbacks in hiring.
Private payrolls increased by just 374,000 in the month. This is well below the Dow Jones estimate at 600,000. However, it was higher than July's 326,000 reading. The revised 330,000 reading was slightly lower.
The majority of new jobs were in leisure and hospitality. This is a hopeful sign that an industry plagued by a labor shortage is continuing to recover.
The month saw 59,000 more people in education and health services, as some hospitals were flooded with viral cases. Schools reopen after the virus epidemic.
Mark Zandi (chief economist at Moody's Analytics), who collaborates with ADP on this report, stated that "the delta variant of COVID-19 seems to have affected the job market recovery." "Job growth is strong but not at the rate of recent months. The path of the pandemic continues to influence job growth.
This apparent downfall comes at an important time.
After a strong recovery from the longest but most severe recession in U.S. History, recent economic data has been disappointing. This could be due to pullbacks from this summer’s surge of Covid delta variant. After a July and August burst, the U.S. has seen an average of 150,000 new cases per day.
Markets await Friday's nonfarm payrolls reports, which are expected to show 720,000 jobs being created and a falling unemployment rate to 5.2% according to Dow Jones estimates.
Wall Street was largely unimpressed by the ADP report. Stock market futures continue to point to a higher open.
